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Certification From United States District Court v. AXIS Insurance Co.

Supreme Court of Washington, En Banc

March 22, 2018

CERTIFICATION FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON IN OHIO SECURITY INSURANCE COMPANY, Plaintiff,
v.
AXIS INSURANCE COMPANY, Defendant.

          YU, J.

         This' case involves an insurance coverage dispute between two authorized foreign insurers, Ohio Security Insurance Company and AXIS Insurance Company. Ohio Security tried to serve AXIS at its office in Chicago, Illinois, rather than through the Washington State Office of the Insurance Commissioner.

         The United States District Court for the Western District of Washington certified a question to this court, asking whether Washington law establishes service through the Washington State Insurance Commissioner (Insurance Commissioner) as the exclusive means of service for authorized foreign insurers in Washington. The answer to the certified question is yes-RCW 4.28.080(7)(a) provides the exclusive means of service on authorized foreign insurers.[1]

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Ohio Security and AXIS became involved in an insurance coverage dispute after a snow storm caused structural damage to a commercial building in Washington. Ohio Security's insured, Grosso Enterprises Tacoma LLC, leased a building to AXIS's insured, Reddy Ice Holdings. The roof of that building collapsed during a 2012 snow storm, which prompted Grosso and Reddy Ice to tender claims to their respective insurers. Ohio Security alleges that it paid for Grosso's loss and that AXIS has an equitable obligation to reimburse Ohio Security for these expenses. Ohio Security sued AXIS in Pierce County Superior Court, but failed to serve the Insurance Commissioner as required by RCW 4.28.080(7)(a). Instead, Ohio Security served AXIS at its Chicago office pursuant to RCW 4.28.080(10) and Washington's long arm statute, RCW 4.28.185.

         Ohio Security served the Insurance Commissioner only after AXIS filed a motion to dismiss for improper service. By this time, the statute of limitations on Ohio Security's claim had already expired. AXIS removed the lawsuit to federal court, where both AXIS and Ohio Security filed summary judgment motions. AXIS argued, in part, that Ohio Security's equitable contribution claim was time barred because its improper service failed to toll the statute of limitations. The district court then certified the following question to this court.

         II. CERTIFIED QUESTION

         "Do RCW 4.28.080(7)(a), RCW 48.02.200, and RCW 48.05.200 establish service through the Washington State Insurance Commissioner as a uniform and exclusive means of service for authorized foreign or alien insurers in Washington State?" Order Certifying Question to Wash. State Supreme Ct, Ohio Sec. Ins. Co. v. Axis Ins. Co., No. C15-5698 BHS, at 2 (W.D. Wash. June 20, 2017).

         III. ANALYSIS

         The legislature has the authority to designate an official as the exclusive agent to receive service of process on behalf of certain classes of defendants. Nitardy v. Snohomish County, 105 Wn.2d 133, 135, 712 P.2d 296 (1986). When the legislature has identified a specific person to receive service, then service on anyone else "is insufficient." Id. This case requires us to sort out multiple statutes to determine who the legislature has designated to receive service of a summons for actions commenced against an authorized foreign insurance company and whether it is exclusive. We answer this certified question of statutory interpretation as a matter of law. Jin Zhu v. N. Cent. Educ. Serv. Dist.-ESD 171, 189 Wn.2d 607, 613, 404 P.3d 504 (2017).

         1. The plain language of RCW 4.28.080 and RCW 48.05.200(1) designate the Insurance Commissioner as the exclusive agent to receive service

         RCW 4.28.080 governs service of a summons. As with all cases involving statutory interpretation, we consider the plain language of the statute to determine the legislature's intent. Dep't of Ecology v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 9-10, 43 P.3d 4 (2002). The statute designates who should be served a summons based on the class of defendants. In this case, the issue is whether the statutory provision that governs service for actions against "an authorized foreign or alien insurance company" provides the exclusive means of service on defendant AXIS, an authorized foreign insurer. RCW 4.28.080(7)(a). The statute dictates that service of a summons on "an authorized foreign or alien insurance company" is "as provided in RCW 48.05.200." Id.

         Turning to RCW 48.05.200(1), it states:

Each authorized foreign or alien insurer must appoint the commissioner as its attorney to receive service of, and upon whom must be served, all legal process issued against it in this state upon causes of action arising within this state. Service upon the commissioner as attorney constitutes service upon the insurer. Service of legal process against the insurer can be had only by service upon the commissioner, except actions upon ...

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